Rautaruukki Falls as Analysts Downgrade Targets: Helsinki Mover

By Kasper Viita -
Feb 18, 2013

Rautaruukki Oyj dropped again today
for the biggest three-day decline since October as analysts cut
their profit estimates for the Finnish maker of stainless steel.

The stock declined as much as 2.2 percent, taking the
three-day drop to 7.7 percent. Rautaruukki was down 1.9 percent
at 5.05 euros at 4:02 p.m., its lowest intraday price since Nov.
21. It was today’s largest decline in the OMX Helsinki 25 index.

“Rautaruukki can’t adjust its capacity much and result
improvement is mostly reliant on cost-cut programs,” Jari Raeisaenen, an analyst at Pohjola Bank Oyj, said today. He
lowered a 12-month price target on the shares to 5.70 euros from
5.90 euros and kept a hold recommendation on the stock.

Rautaruukki’s fourth-quarter net loss widened 37 percent to
56 million euros amid a recession in Europe, its main source of
revenue, it said on Feb. 15. The company predicted comparable
sales staying level with 2012 this year as operating profit
improves and becomes positive.

“Future outlook gave no reasons to cheer,” Juha Kinnunen,
an analyst at Helsinki-based Inderes Oy, said in a note. Profit
levels are “far from any real turnaround” as interest expenses
on debt accumulated last year will push the 2013 result “in the
red.”

Today’s downgrades included Johannes Grasberger, an analyst
at Nordea Bank AB, who cut his price target to 5 euros from 5.50
euros. Ari Jaervinen, an analyst at Danske Bank A/S reduced the
target to 5.50 euros from 5.70 euros, while Fabrice Farigoule at
France’s Alphavalue SAS dropped it to 6.27 euros from 7.12
euros.